Leo, Amanda, and Nancy are partners with the following capital balances and profit-and-loss sharing ratios: Leo...

Leo, Amanda, and Nancy are partners with the following capital balances and profit-and-loss sharing

ratios:

Leo (30%) $500,000

Amanda (25%) 300,000

Nancy (45%) 650,000

Required:

Prepare the journal entries to admit Tim into the partnership and calculate the partners’ capital balances immediately after his admission under each of the following independent scenarios:

1-Amanda assigns half of her interest to Tim for $200,000. (1 point)

2-Tim invests $100,000 cash in the partnership for a 20% interest in the partnership capital and profits and the partnership assets are revalued. (5 points)

3-Tim invests $170,000 cash in the partnership for a 10% interest in the capital and profits of the partnership and the partnership assets are revalued. (4 points)

4-Tim invests $350,000 cash in the partnership for a 20% interest in the capital and profits of the partnership and the partnership assets are not revalued. (5 points)

Solutions

Expert Solution

Answer:

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

"Peter, Tom, and Jason have capital balances and profit-and-loss sharing ratios as follows: Peter (10%): 100,000...

"Peter, Tom, and Jason have capital balances and profit-and-loss sharing ratios as follows: Peter (10%): 100,000 Tom (50%): 400,000 Jason (40%): 200,000 Required (show all your calculations): 1-Tom retires and is paid $450,000 based on the terms of the original partnership agreement. If the bonus method is used, what is the capital of the remaining partners? (4 points) 2-Tom retires and is paid $500,000 based on the terms of the original partnership agreement. If the goodwill method is used, what...

A partnership has the following balance sheet prior to liquidation (partners’ profit and loss ratios are...

A partnership has the following balance sheet prior to liquidation (partners’ profit and loss ratios are in parentheses): Cash $ 33,000 Liabilities $ 50,000 Other assets 100,000 Playa, capital (40%) 24,000 Bahia, capital (30%) 29,000 Arco, capital (30%) 30,000 Total $ 133,000 Total $ 133,000 During liquidation, other assets are sold for $80,000, liabilities are paid in full, and $15,000 in liquidation expenses are...

. ABC partners have capital balances and share profit and loss equally: A=$20,000, B=$15,000 and C...

. ABC partners have capital balances and share profit and loss equally: A=$20,000, B=$15,000 and C = $65,000. During liquidation a $75,000 loss on non cash assets is suffered. How much will C eventually receive if: A: All partners are solvent B. B and C are solvent. C. Only C is solvent. In this instance how much is C’s claim against A & B each?

S & Y are partners with profit sharing ratio as 2:1

S & Y are partners with profit sharing ratio as 2:1. The position of the firm 31st December 2004 when they decided to dissolve the business was as follows:LiabilitiesRs.AssetsRs.Sundry Creditor1,50,000Plant & Machinery2,50,000General Reserve1,00,000Furniture40,000Capital Accounts:Stock1,00,000S quad2,20,000Debtors2,00,000Y quad2,20,0004,40,000Cash at bank1,00,000Total6,90,000Total6,90,000The details or realization was as follows: 1. S took over plant & machinery and furniture at book value less 10% 2. Y took over the stock at Rs. 1,75,000 3. Debtors realized Rs. 1,85,000 4. Sundry creditors were settled at a discount...

The Tim-Tam-Tom partnership has the following capital balances and profit and loss allocation: Tim (30% of...

The Tim-Tam-Tom partnership has the following capital balances and profit and loss allocation: Tim (30% of gains and losses) 100,000 Tam (20%) 150,000 Tom (50%) 200,000 Tem invests $220,000 in cash, paid to the partnership, for a 20% ownership stake. Using the Goodwill method, what are the goodwill amount to be recognized and Tim’s capital balance, respectively? 650,000; 220,000; 650,000; 295,000; 430,000; 229,000; 430,000; 295,000; None of the answers is correct The Tim-Tam-Tom partnership has the following capital balances and profit and...

Ahmed and Sahil are partners sharing profit in the ratio of 3: 2. They agree to...

Ahmed and Sahil are partners sharing profit in the ratio of 3: 2. They agree to admit Chirag for 1/5 share in future profit. Chirag brings SAR. 250,000 as capital and enable to bring her share of goodwill in cash, the goodwill of the firm to be valued at SAR. 180,000. At the time of admission goodwill existed in the books of the firm at SAR.80,000. 1. Make the journal entry related to the cash brought by Chirag (1 Point)...

Betsey and Brenda are partners. After the books are closed, their capital balances are $240,000 and...

Betsey and Brenda are partners. After the books are closed, their capital balances are $240,000 and $260,000, respectively. They share profits by a 2:6 ratio. They have decided to admit Angela to the partnership. Record Angelaʹs transaction if she purchases a 20% interest from the partnership for $90,000? Record Angelaʹs transaction if she purchases a 25% interest from the partnership for $200,000? Record Angelaʹs transaction if she purchases a 15% interest from the partnership for $100,000? Record Angelaʹs transaction if...

Gale, McLean, and Lux are partners of Burgers and Brew Company with capital balances as follows:...

Gale, McLean, and Lux are partners of Burgers and Brew Company with capital balances as follows: Gale, $91,000; McLean, $83,000; and Lux, $154,000. The partners share profit and losses in a 3:2:5 ratio. McLean decides to withdraw from the partnership. Prepare General Journal entries to record the May 1, 2017, withdrawal of McLean from the partnership under each of the following unrelated assumptions: a. McLean sells his interest to Freedman for $175,000 after Gale and Lux approve the entry of...

Tinkers, Evers and Chance are partners with capital balances of $75,000, $126,000, and $61,500, respectively on...

Tinkers, Evers and Chance are partners with capital balances of $75,000, $126,000, and $61,500, respectively on January 26, 2018. All nominal accounts have been adjusted and closed as of January 26, 2018. The partners share profits and losses according to the following percentages: 35% for Tinkers, 40% for Evers, and 25% for Chance. On January 26, 2018, Aparicio is to join the partnership upon contributing $67,500 in cash and some equipment with a book value of $14,500 and a fair...

Gale, McLean, and Lux are partners of Burgers and Brew Company with capital balances as follows:...

Gale, McLean, and Lux are partners of Burgers and Brew Company with capital balances as follows: Gale, $88,000; McLean, $77,000; and Lux, $151,000. The partners share profit and losses in a 3:2:5 ratio. McLean decides to withdraw from the partnership. Prepare General Journal entries to record the May 1, 2020, withdrawal of McLean from the partnership under each of the following unrelated assumptions: a. McLean sells his interest to Freedman for $172,000 after Gale and Lux approve the entry of...

Subjects